What Will the U.S. Postal Service Look Like in 10 Years?

To keep up with electronic messaging trends and save itself from insolvency, the U.S. Postal Service is digitizing itself.

They know your name, stop by your house daily and soon they could be predicting the weather and reporting on the quality of your cell phone service. The United States Postal Service (USPS), the nation’s second-biggest civilian employer, is struggling to adhere its stamp in a digital world.

The USPS ended fiscal 2010 with an $8.5 billion loss, thanks to exploding use of e-mail, social media and other forms of electronic messaging and decreasing mail volumes. For the first time in the service’s 200-year history, first-class mail — 55 percent of its revenue — is down. On top of that, the USPS owes $5.5 billion to the government for retiree health benefits. At a recent hearing, Postmaster Pat Donohue said that if the government doesn’t relieve the service of its financial obligation, it will face insolvency by September.

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To boost revenue, officials are considering placing sensors on mail trucks to capture data, such as weather predictions, cell phone coverage and street conditions, but experts agree that it will take much more to keep mail in service for the long run.

Mail of the Future

“I don’t think there is anybody who believes that the postal service in 2020 will look anything like it does today,” said John Callan, managing director of Ursa Major Associates, a business strategy consulting firm and recognized thought leader and strategy consultant in the postal industry.

Reinventing the USPS was the topic of June’s PostalVision 2020 conference in Washington, D.C., the most tech-heavy postal conference held to date, said Callan, who organized the gathering. “We’re coming at this from a very futuristic level,” he said.

Google executives, social media experts and other technology minds — like Jeff Jarvis, author of What Would Google Do?; Jeremy Grant, senior executive adviser from the National Institute of Standards and Technology, and Google Vice President Vint Cerf — spoke about technology’s role in ultimately building the equivalent of the physical postal network in digital form.

“It’s not about Google coming to the Postal Service’s rescue,” Callan said. “It’s that Google type of thinking.”

One idea was an application that utilizes an e-mailbox to send and receive secure and official communication within federal agencies. This might be paired with physical postal kiosks that are connected to government department call centers.

Transferring Trust to the Web

At the crux of this strategy is the idea that the USPS offers a level of trust and conformity that officials are confident can be transferred to the digital world and will differentiate a uniform electronic USPS platform from any other e-mail service. In April, the Office of Inspector General released a report that outlined the Internet’s shortcomings, including its susceptibility to viruses and privacy issues, some Americans’ lack of access and a shortage of affordable digital currency exchanges.

These are gaps the USPS hopes to fill.

The USPS is the only delivery service that reaches every address in the nation — 150 million residences, businesses and post office boxes — and it could theoretically take its entire national database and link each physical address to a private e-mail address.

“We all have e-mail accounts … and use them for different purposes,” said Jennifer Tomlinson, director of growth and strategy at Canada-based Innovapost and a speaker at PostalVision 2020. “I have six or seven myself, and having one that I know is the trusted, secure one would be very beneficial.”

Tomlinson helped transform Canada’s postal service and consults regularly with European posts. She said in the last 18 months, almost every post in Europe started offering a digital postal service that forms the basis for other electronic services.

A small town in Finland is experimenting with a dual mail service platform, delivering physical mail only three days a week, and electronic mail six days, she said.

The USPS handles 45 percent of all mail sent worldwide, so incorporating a dual platform isn’t as simple. And such a move could be hampered by congressional limits on the types of services the USPS can offer.

However, Tomlinson said that creating an e-government platform with the USPS and partnering with the private sector to help take it to the market wouldn’t necessarily require a policy change. Private companies have already launched cloud-based products to support this model and are talking with the USPS about implementing their services.

Advancing Technology

As a more immediate revenue boost, the USPS is experimenting with a hybrid of physical and digital tactics. The USPS is testing Real Mail Notification, in which customers receive daily e-mails or text messages about what mail was placed in their physical mailbox. The service has gotten rave reviews from credit card companies, which could track when a customer receives a bill or new offer.

Customers would have the choice to opt-in, and only certain information would be shared. “We encourage companies to be very privacy-minded,” said USPS Chief

Marketing Officer Paul Vogel.

In January, Vogel signed a five-year contract with eBay to provide online tools and marketing programs to help small businesses grow through the use of direct mail, while providing discounted shipping prices for new customers.

Even with technology advancing at a rapid pace (the USPS is looking at digital watermarking to replace quick response codes) one thing is certain: People still like receiving mail, said Vogel. “You don’t see many e-mails hanging up on the refrigerator.” But people don’t like sending mail, and that’s where the “electronic sweetener” comes in, he said. “It’s about making a [traditional] mail piece relevant today.”